Arizona CXXXVIII - City of Glendale opting out of lease agreement with the Coyotes

[uhlaw97]

Savoir-Faire is EVERYWHERE!!!

 

[BKIslandersFan]

Didn't Nassau have a big renovation done after the Islanders went to Brooklyn?

No. Just external aesthetics.

 

[aqib]

They called it a renovation, but it was more of a face lift Basically they upgraded the ice plant, the WiFi & other infrastructure, plus they removed about 2000 seats. And they installed some good awful fascia along the outside of the building to make it seem like more modern. All at a cost of $175M. I haven't been there in ages, so I can't say if the investment was worthwhile.

Why did they remove 2K seats then? I haven't been there since they redid it because I left NY in 2003

 

[TheWhiskeyThief]

Why did they remove 2K seats then? I haven't been there since they redid it because I left NY in 2003

Luxury boxes

 

[Ernie]

They called it a renovation, but it was more of a face lift Basically they upgraded the ice plant, the WiFi & other infrastructure, plus they removed about 2000 seats. And they installed some good awful fascia along the outside of the building to make it seem like more modern. All at a cost of $175M. I haven't been there in ages, so I can't say if the investment was worthwhile.

So should we budget $175m to make the AVMS useable for an NHL team?

Perhaps Glendale can give Meruelo a "deal" and only charge him $100m for a 5 year lease.

 

[GreenHornet]

Savoir-Faire is EVERYWHERE!!!

Nice pull. #ISWYDT

 

[Knights2017]

So should we budget $175m to make the AVMS useable for an NHL team?

Perhaps Glendale can give Meruelo a "deal" and only charge him $100m for a 5 year lease.

No.. it won't take $175m and the Coyotes won't care if all of that stuff is done. Get some ice down, maybe another large screen at one end of the rink and call it a rink for a couple seasons

 

[Ernie]

No.. it won't take $175m and the Coyotes won't care if all of that stuff is done. Get some ice down, maybe another large screen at one end of the rink and call it a rink for a couple seasons

*five seasons

 

[TheLegend]

*five seasons

*based upon current information. Subject to change.

 

[Mightygoose]

*based upon current information. Subject to change.

Subject to change can also include unforseen delays 6-7 seasons. Possibly longer

 

[TheLegend]

Subject to change can also include unforseen delays 6-7 seasons. Possibly longer

That’s why I didn’t specify either way.

 

[voyageur]

They aren’t going to Hamilton. Give a rest.

Well if the NHL wanted a significant increase in revenues, and the players dealing with escrow too, Hamilton is your city. They started renovating Copps Coliseum before the pandemic, backed by some heavy financial hitters.

A franchise like Arizona mired in debt and soon to be homeless looks promising for a few candidates. If you are Merulo, a minority share in a Houston franchise is more money than he is making now.

I really can't believe anyone would invest in a new arena for the NHL in greater Phoenix. New York, shared arena, L.A shared arena, Chicago shared arena, Detroit shared arena, Philly shared arena, Dallas shared arena, Boston shared arena, Washington shared arena, Denver shared arena. The only large metropolis in the US operating both professional basketball and hockey without a shared arena is Miami, and that's all based on real estate, and requires government subsidy to still not be profitable on the hockey end. Minnesota too, but Minnesota is the hockey state of the U.S.

This seems like a money pit, in a different location.

 

[TheLegend]

Well if the NHL wanted a significant increase in revenues, and the players dealing with escrow too, Hamilton is your city. They started renovating Copps Coliseum before the pandemic, backed by some heavy financial hitters.

A franchise like Arizona mired in debt and soon to be homeless looks promising for a few candidates. If you are Merulo, a minority share in a Houston franchise is more money than he is making now.

I really can't believe anyone would invest in a new arena for the NHL in greater Phoenix. New York, shared arena, L.A shared arena, Chicago shared arena, Detroit shared arena, Philly shared arena, Dallas shared arena, Boston shared arena, Washington shared arena, Denver shared arena. The only large metropolis in the US operating both professional basketball and hockey without a shared arena is Miami, and that's all based on real estate, and requires government subsidy to still not be profitable on the hockey end. Minnesota too, but Minnesota is the hockey state of the U.S.

This seems like a money pit, in a different location.

It isn't just an arena. It's essentially a scaled down version of Westgate. He would get all of the income from the arena and surrounding businesses via rents, plus housing unit sales, etc. If Tempe allows for a taxing district he'll get that on top of it.

He also now has a sportsbook license through the Coyotes. So he's got enough reasons NOT to walk away from the market.

 

[OG6ix]

Well if the NHL wanted a significant increase in revenues, and the players dealing with escrow too, Hamilton is your city. They started renovating Copps Coliseum before the pandemic, backed by some heavy financial hitters.

A franchise like Arizona mired in debt and soon to be homeless looks promising for a few candidates. If you are Merulo, a minority share in a Houston franchise is more money than he is making now.

I really can't believe anyone would invest in a new arena for the NHL in greater Phoenix. New York, shared arena, L.A shared arena, Chicago shared arena, Detroit shared arena, Philly shared arena, Dallas shared arena, Boston shared arena, Washington shared arena, Denver shared arena. The only large metropolis in the US operating both professional basketball and hockey without a shared arena is Miami, and that's all based on real estate, and requires government subsidy to still not be profitable on the hockey end. Minnesota too, but Minnesota is the hockey state of the U.S.

This seems like a money pit, in a different location.

How would hamilton bring in signifucant revenue? It's a small city now with lower income than many GTA cities, There isn't longterm growth in Hamilton either with potential upside to TV ratings etc.

 

[sh724]

Well if the NHL wanted a significant increase in revenues, and the players dealing with escrow too, Hamilton is your city. They started renovating Copps Coliseum before the pandemic, backed by some heavy financial hitters.

A franchise like Arizona mired in debt and soon to be homeless looks promising for a few candidates. If you are Merulo, a minority share in a Houston franchise is more money than he is making now.

I really can't believe anyone would invest in a new arena for the NHL in greater Phoenix. New York, shared arena, L.A shared arena, Chicago shared arena, Detroit shared arena, Philly shared arena, Dallas shared arena, Boston shared arena, Washington shared arena, Denver shared arena. The only large metropolis in the US operating both professional basketball and hockey without a shared arena is Miami, and that's all based on real estate, and requires government subsidy to still not be profitable on the hockey end. Minnesota too, but Minnesota is the hockey state of the U.S.

This seems like a money pit, in a different location.

You, along with the rest of us, have no idea what Meruelo makes or doesnt make. It is all speculation. Would you be willing to lose $1MM on a business venture if it meant you would make $2MM on a different business venture? This is the case for most team owners. Also there is (can be) a significant difference between accounting profitability and economic profitability.

As i have pointed out many times, there are reasons the NHL would not want to replace one of the least profitable teams with a team that is significantly more profitable. It would create an artificial bump in HRR and thus the salary cap. The result would be the cap increasing at a faster rate than teams can increase their revenues, thus teams have to choose to be closer to the cap floor (less competitive) or lose (more) money.

Almost all arenas that are shared either have shared arena management/ownership or shared team ownership. The ones that do not have economic reasons for sharing the arena that extend beyond the sports teams, like Boston for example.

There is not a hockey team in Miami, the team plays in Sunrise which is a suburb of Fort Lauderdale. The Panthers may lose money but the owner makes significant money on the operation of the arena and has no problem with losing money on hockey as without the hockey team he doesnt get the arena money.

 

[TheWhiskeyThief]

Well if the NHL wanted a significant increase in revenues, and the players dealing with escrow too, Hamilton is your city. They started renovating Copps Coliseum before the pandemic, backed by some heavy financial hitters.

A franchise like Arizona mired in debt and soon to be homeless looks promising for a few candidates. If you are Merulo, a minority share in a Houston franchise is more money than he is making now.

I really can't believe anyone would invest in a new arena for the NHL in greater Phoenix. New York, shared arena, L.A shared arena, Chicago shared arena, Detroit shared arena, Philly shared arena, Dallas shared arena, Boston shared arena, Washington shared arena, Denver shared arena. The only large metropolis in the US operating both professional basketball and hockey without a shared arena is Miami, and that's all based on real estate, and requires government subsidy to still not be profitable on the hockey end. Minnesota too, but Minnesota is the hockey state of the U.S.

This seems like a money pit, in a different location.

For developers, money pits are fine unless the banks turn off the taps, then it becomes about cash flow. You write off amortization of the team purchase over 15 years against other profitable businesses and expenses on this project do the same. It’s a tax deferral scheme, not a business.

For people who invest in a lot of cash rich businesses for creative accounting purposes a project like this is a literal gold mine.

 

[Dirty Old Man]

I really can't believe anyone would invest in a new arena for the NHL in greater Phoenix. .

Of course you don't; it's who you are.

 

[aqib]

It isn't just an arena. It's essentially a scaled down version of Westgate. He would get all of the income from the arena and surrounding businesses via rents, plus housing unit sales, etc. If Tempe allows for a taxing district he'll get that on top of it.

He also now has a sportsbook license through the Coyotes. So he's got enough reasons NOT to walk away from the market.

So I am wondering about the sportsbook. He doesn't have the ONLY sportsbook in Arizona. Is there enough business to go around? We see this a lot when things become legal everyone floods in and then the market saturates. We saw it when casino gambling expanded outside Vegas and AC. I am seeing in now with legal marijuana in Ontario. Too many stores in Toronto so a lot of them are already trying to sell.

 

[TheLegend]

So I am wondering about the sportsbook. He doesn't have the ONLY sportsbook in Arizona. Is there enough business to go around? We see this a lot when things become legal everyone floods in and then the market saturates. We saw it when casino gambling expanded outside Vegas and AC. I am seeing in now with legal marijuana in Ontario. Too many stores in Toronto so a lot of them are already trying to sell.

Most wagering will be placed online. 24/7/365

Apps are where it's at anymore.

 

[BKIslandersFan]

So should we budget $175m to make the AVMS useable for an NHL team?

Perhaps Glendale can give Meruelo a "deal" and only charge him $100m for a 5 year lease.

Would it take that much? Figure they only need to renovate dressing room and possibly ice machine.

Which is not cheap but I doubt it cost anywhere near $175M.

 

[Ernie]

Would it take that much? Figure they only need to renovate dressing room and possibly ice machine.

Which is not cheap but I doubt it cost anywhere near $175M.

Well no clearly a lot of the cost of the Nassau Coliseum conversion was adding boxes etc.

But the unanswered question is how much revenue the Coyotes would lose by not having modern stadium features like boxes and club seating and premium concessions etc.

Back of the napkin math (average attendance x average ticket cost) suggests that the Coyotes were on track for $35m in ticket revenue in 2020. Perhaps add another $10m for concessions / merchandise etc.

I could see them riding out that hit for a season, but for 5 seasons? The idea that they can just put a dressing room and an ice plant in and have things go on uninterrupted is utter fantasy.

 

[BKIslandersFan]

Well no clearly a lot of the cost of the Nassau Coliseum conversion was adding boxes etc.

But the unanswered question is how much revenue the Coyotes would lose by not having modern stadium features like boxes and club seating and premium concessions etc.

Back of the napkin math (average attendance x average ticket cost) suggests that the Coyotes were on track for $35m in ticket revenue in 2020. Perhaps add another $10m for concessions / merchandise etc.

I could see them riding out that hit for a season, but for 5 seasons? The idea that they can just put a dressing room and an ice plant in and have things go on uninterrupted is utter fantasy.

I think they can survive 5 years. Anything more than that though they are gone.

 

[aqib]

.

There is not a hockey team in Miami, the team plays in Sunrise which is a suburb of Fort Lauderdale. The Panthers may lose money but the owner makes significant money on the operation of the arena and has no problem with losing money on hockey as without the hockey team he doesnt get the arena money.

Are you sure about that? They went to Broward County for a subsidy in 2013.

 

[Melrose Munch]

You, along with the rest of us, have no idea what Meruelo makes or doesnt make. It is all speculation. Would you be willing to lose $1MM on a business venture if it meant you would make $2MM on a different business venture? This is the case for most team owners. Also there is (can be) a significant difference between accounting profitability and economic profitability.

As i have pointed out many times, there are reasons the NHL would not want to replace one of the least profitable teams with a team that is significantly more profitable. It would create an artificial bump in HRR and thus the salary cap. The result would be the cap increasing at a faster rate than teams can increase their revenues, thus teams have to choose to be closer to the cap floor (less competitive) or lose (more) money.

Almost all arenas that are shared either have shared arena management/ownership or shared team ownership. The ones that do not have economic reasons for sharing the arena that extend beyond the sports teams, like Boston for example.

There is not a hockey team in Miami, the team plays in Sunrise which is a suburb of Fort Lauderdale. The Panthers may lose money but the owner makes significant money on the operation of the arena and has no problem with losing money on hockey as without the hockey team he doesnt get the arena money.

"Suburb of Fort Lauderdale" it's the Miami metropolitan area as defined by the Census Bureau.

 

[Ernie]

The Panthers had to make public their financials when they were pushing for that subsidy, and they were not pretty.